EMERGING MARKETS-Currencies in the cross-hairs as Fed hike looms

LONDON, June 12 (Reuters) - Argentina’s peso, the Turkish lira, South African rand, Mexican peso and Pakistan’s rupee all weakened on Tuesday as pressure remained firmly on emerging markets.

An encouraging first meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un failed lift either South Korea’s won or MSCI’s 24-country emerging stocks index as broader strains dominated.

Instead it was expectations that the United States will raise its interest rates for a second time this year on Wednesday and a lengthy list of country-specific pressures that kept investors cautious.

The Mexican peso, which has been dogged by fears that Trump may scrap the North American Free Trade Agreement (NAFTA), was stuck at an almost 18-month low while Argentina’s peso and Turkey’s lira where near record lows.

South Africa’s rand was its weakest in six months amid renewed worries about its economy, while Pakistan’s rupee drooped again a day after its third devaluation in seven months.

“The tone is still not great, as you can see from the price action,” said Standard Life Aberdeen Portfolio manager Viktor Szabo.

“It is a shame we are not seeing more of a positive market reaction after all the central bank moves (rate rises) we have seen. It has not only been Turkey, but everywhere.”

Bond markets were a wall of red, too, as the average borrowing cost on EM currency government bonds climbed to a 15-month high.

It wasn’t only the prospect of another U.S. rate increase that was moving markets. The European Central Bank might also signal on Thursday when and how it plans to wind down its 2.55 trillion euro three-year stimulus programme.

Euro zone satellite the Czech Republic could raise interest rates again in response, analysts reckon. Its 10-year bond yield reached its highest in more than three years at just above 2.1 percent.

In the Western Balkans, meanwhile, there are signs that Macedonia and Greece are close to reaching a deal to resolve a decades-old dispute over the ex-Yugoslav republic’s name, sources told Reuters.

The row has blocked the tiny Balkan state’s hopes to join the European Union and the NATO military alliance. Greek Prime Minister Alexis Tsipras and his Macedonian counterpart Zoran Zaev were expected to discuss the issue by phone on Tuesday.

Turkey’s lira dropped back towards recent record lows amid continuing military moves in Iraq and uncertainty around political influence on the country’s central bank.

Deputy Prime Minister Mehmet Simsek said in a television interview that the country had withdrawn all of its gold holding from the U.S. Federal Reserve and that it had completed a simplification of the country’s four interest rates.